What’s Driving the Cost of Health Insurance
(Hint: It’s all about the profits.)
Every exchange of goods and services includes an exchange of value. Or otherwise stated, every purchase costs something. Such is the case with health insurance. Individuals and employers alike “purchase” insurance to help with unplanned costs associated with individual health and well-being. Likewise, it’s accurate that the “value” of one’s individual health and well-being is infinite – that there is no ceiling on what it’s worth to address challenges and stay healthy and vibrant.
But the cost of traditional health insurance continues to climb. Actually those costs are skyrocketing. Does that mean that people are increasingly less healthy and need more care? Or do rising costs indicate that care providers are charging more for their trained expertise and services? Perhaps the answer is yes to both questions, but a deeper dive will reveal the real driver of increasing costs with traditional plans – it’s coming from the traditional insurance carriers themselves.
That’s right. The companies that are “helping employers and people” through rigid one-size-fits-all plans are largely the reason for the skyrocketing costs of health insurance. And the reason why? An age-old reason. It’s called greed. Some companies are classified as non-profit, but financial results will tell you otherwise. Many companies are publicly traded, and simply put, their primary objective is to make money for their investors. Let’s look at the 2022 numbers:
- UnitedHealth Group – Profits were $20.1 billion on revenues of $324.2 billion
- Cigna – $6.7 billion in profits in 2022 on $180.5 billion in revenue
- CVS Health (which includes Aetna) – $4.1 billion in profits on $322.5 billion in revenue
- Blue Cross Blue Shield – an association of independent plans, but estimates project revenue growth of 5.8% with profit margins @ 3%
Those numbers are staggering. And that’s what is driving the cost of traditional health insurance plans. And who is bearing the burden of those growing costs? Employers and individuals. Yes, the customers who look to these plans to help them are being abused solely for the financial benefit of those companies’ leaders and investors.
And why does that happen? Because over time, these traditional insurance companies have gained control in the exchange of value related to their plans. And when one side has control, they can dictate the price they charge as well as the included features. Simply put, it’s somewhat of a “take it or leave it” mindset.
Guess what? As an employer, you can leave it. You can take back control. You can be in charge of your healthcare plan that benefits your employees. And you can save money on the cost of that plan too. Large global companies have been in control of their healthcare plans for decades. And in almost every situation, those plans feature better benefits for the people they are designed to help.
Costs will continue to rise – and benefits will continue to shrink – as long as the traditional insurance companies are in control of your plan. It’s time for companies of all sizes to make a change.
Contact us to learn more.
